What changed in this filing

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Item 1. Financial Statements

2024-06-27 compared with 2024-03-26 · 194 added, 89 removed, 429 unchanged (40% of the section changed)

3 unchanged sentences

(in millions except per share amounts)

Three months ended

February 29, 2024 February 28, 2023

Three months ended May 31, Six months ended May 31,

2024 2023 2024 2023

Net sales $ 1,643.2 $ 1,659.2 $ 3,245.9 $ 3,224.7

10 unchanged sentences

Income from unconsolidated operations

16.8 10.3 38.1 24.3

Net income $ 184.2 $ 152.1 $ 350.2 $ 291.2

4 unchanged sentences

Cash dividends paid per share – voting and non-voting $ 0.42 $ 0.39 $ 0.84 $ 0.78

Cash dividends declared per share – voting and non-voting $ 0.42 $ 0.39 $ 0.42 $ 0.39

See notes to condensed consolidated financial statements (unaudited).

2 unchanged sentences

(in millions)

Three months ended

February 29, 2024 February 28, 2023

Three months ended May 31,

Six months ended May 31,

2024 2023 2024 2023

Net income $ 184.2 $ 152.1 $ 350.2 $ 291.2

48 unchanged sentences

(in millions)

Three months ended

February 29, 2024 February 28, 2023

Six months ended May 31,

Operating activities

3 unchanged sentences

Stock-based compensation 31.1 38.5

Deferred income tax expense (benefit) ( 27.8 ) ( 1.2 )

Income from unconsolidated operations ( 38.1 ) ( 24.3 )

12 unchanged sentences

Short-term borrowings, net 80.3 ( 776.8 )

Long-term debt borrowings — 496.4

Payment of debt issuance costs — ( 1.1 )

Long-term debt repayments ( 28.0 ) ( 9.1 )

6 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 0.5 33.4

Increase in cash and cash equivalents 11.4 22.8

Increase (decrease) in cash and cash equivalents ( 0.3 ) ( 206.6 )

Cash and cash equivalents at beginning of period 166.6 334.0

6 unchanged sentences

Non-Voting Shares Common Stock Amount Retained Earnings Accumulated Other Comprehensive (Loss) Income Non-controlling Interests Total Shareholders’ Equity

Three months ended February 29, 2024

Three months ended May 31, 2024

Balance, February 29, 2024 16.6 251.7 $ 2,213.4 $ 3,412.8 $ ( 393.7 ) $ 24.9 $ 5,257.4

Net income — 184.2 — — 184.2

Net income attributable to non-controlling interest — — — 1.8 1.8

Other comprehensive income, net of tax — — 6.1 0.1 6.2

Dividends — ( 112.7 ) — — ( 112.7 )

Stock-based compensation 19.4 — — — 19.4

Shares purchased and retired ( 0.1 ) — ( 4.1 ) ( 4.0 ) — — ( 8.1 )

Shares issued 0.3 — 6.0 — — — 6.0

Equal exchange ( 0.2 ) 0.2 — — — — —

Balance, May 31, 2024

16.6 251.9 $ 2,234.7 $ 3,480.3 $ ( 387.6 ) $ 26.8 $ 5,354.2

Six months ended May 31, 2024

Balance, November 30, 2023

2 unchanged sentences

Net income attributable to non-controlling interest — — — 3.9 3.9

Other comprehensive (loss), net of tax — — ( 5.1 ) — ( 5.1 )

Other comprehensive income, net of tax — — 1.0 0.1 1.1

Dividends — ( 112.7 ) — — ( 112.7 )

Stock-based compensation 31.1 — — — 31.1

2 unchanged sentences

Equal exchange ( 0.6 ) 0.6 — — — — —

Balance, May 31, 2024

16.6 251.9 $ 2,234.7 $ 3,480.3 $ ( 387.6 ) $ 26.8 $ 5,354.2

Three months ended May 31, 2023

Balance, February 28, 2023 17.4 250.8 $ 2,152.1 $ 3,155.1 $ ( 437.1 ) $ 17.6 $ 4,887.7

Net income — 152.1 — — 152.1

Net income attributable to non-controlling interest — — — 2.0 2.0

Other comprehensive income, net of tax — — 5.6 0.3 5.9

Dividends — ( 104.6 ) — — ( 104.6 )

Stock-based compensation 26.7 — — — 26.7

Shares purchased and retired ( 0.3 ) — ( 7.9 ) ( 11.2 ) — — ( 19.1 )

Shares issued 0.3 — 6.2 — — — 6.2

Equal exchange ( 0.2 ) 0.2 — — — — —

Balance, May 31, 2023

17.2 251.0 $ 2,177.1 $ 3,191.4 $ ( 431.5 ) $ 19.9 $ 4,956.9

Three months ended February 28, 2023

Six months ended May 31, 2023

Balance, November 30, 2022

3 unchanged sentences

Other comprehensive income (loss), net of tax — — 49.1 ( 1.6 ) 47.5

Dividends — ( 104.6 ) — — ( 104.6 )

Stock-based compensation 38.5 — — — 38.5

2 unchanged sentences

Equal exchange ( 0.4 ) 0.4 — — — — —

Balance, February 28, 2023

Balance, May 31, 2023

17.2 251.0 $ 2,177.1 $ 3,191.4 $ ( 431.5 ) $ 19.9 $ 4,956.9

6 unchanged sentences

In our opinion, the accompanying condensed consolidated financial statements contain all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position and the results of operations for the interim periods presented.

The results of consolidated operations for the three-month period ended February 29, 2024 are not necessarily indicative of the results to be expected for the full year.

The results of consolidated operations for the six-month period ended May 31, 2024 are not necessarily indicative of the results to be expected for the full year.

Historically, our net sales, net income and cash flow from operations have been lower in the first half of the fiscal year and higher in the second half of the fiscal year.

6 unchanged sentences

All outstanding amounts related to suppliers participating in the SCF are recorded within the line entitled Trade accounts payable in our condensed consolidated balance sheets, and the associated payments are included in operating activities within our consolidated statements of cash flows.

As of February 29, 2024 and November 30, 2023, the amounts due to suppliers participating in the SCF and included in trade accounts payable were approximately $ 308.6 million and $ 300.5 million, respectively.

As of May 31, 2024 and November 30, 2023, the amounts due to suppliers participating in the SCF and included in trade accounts payable were approximately $ 360.4 million and $ 300.5 million, respectively.

Accounting Pronouncement Partially Adopted

26 unchanged sentences

We continue to evaluate changes to our organizational structure to reduce fixed costs, simplify or improve processes, and improve our competitiveness.

The following is a summary of special charges recognized in the three months ended February 29, 2024 and February 28, 2023

The following is a summary of special charges recognized in the three and six months ended May 31, 2024 and 2023

(in millions):

Three months ended

February 29, 2024 February 28, 2023

Three months ended May 31, Six months ended May 31,

2024 2023 2024 2023

Employee severance and related benefits $ 1.0 $ 7.0 $ 3.1 $ 31.8

Cash 0.8 5.8 2.9 8.0

Non-Cash — 0.4 — 1.2

Total special charges $ 1.8 $ 13.2 6.0 41.0

During the three months ended February 29, 2024, we recorded $ 4.2 million of special charges, consisting principally of $ 2.8 million associated with our Global Operating Effectiveness (GOE) program, as more fully described below, and $ 1.4 million associated with the transition of a manufacturing facility in Europe, Middle East, and Africa (EMEA), as more fully described below.

During the three months ended February 28, 2023, we recorded $ 27.8 million of special charges, consisting principally of $ 24.8 million associated with our GOE program, as more fully described below, $ 0.9 million associated with the transition of a manufacturing facility in EMEA, and streamlining actions of $ 1.3 million in the Americas region and $ 0.8 million in the EMEA region.

During the three months ended May 31, 2024, we recorded $ 1.8 million of special charges, consisting principally of $ 1.8 million associated with our Global Operating Effectiveness (GOE) program, as more fully described below.

During the six months ended May 31, 2024, we recorded $ 6.0 million of special charges, consisting principally of $ 4.6 million associated with our GOE program, as more fully described below, and $ 1.4 million associated with the transition of a manufacturing facility in Europe, Middle East, and Africa (EMEA), as more fully described below.

During the three months ended May 31, 2023, we recorded $ 13.2 million of special charges, consisting principally of $ 8.6 million associated with our GOE program, as more fully described below, $ 1.3 million associated with the transition of a manufacturing facility in EMEA, as more fully described below, and streamlining actions of $ 3.2 million in the Americas region.

During the six months ended May 31, 2023, we recorded $ 41.0 million of special charges, consisting principally of $ 33.4 million associated with our GOE program, as more fully described below, $ 2.2 million associated with the transition of a manufacturing facility in EMEA, as more fully described below, and streamlining actions of $ 4.5 million in the Americas region and $ 0.9 million in the EMEA region.

In 2022, our Management Committee approved the GOE program, which is expected to eliminate costs associated with our supply chain operations, as well as across the remainder of the organization.

4 unchanged sentences

The total costs incurred under the GOE program were approximately $ 48 million as of November 30, 2023.

Special charges recognized during the three months ended February 29, 2024, under our GOE program included $ 2.1 million in severance and related benefits costs and $ 0.7 million of third-party expenses and other costs.

Special charges recognized during the three months ended February 28, 2023, under our GOE program included $ 19.7 million associated with the voluntary retirement program, $ 4.5 million in severance and related benefits costs and $ 0.6 million of third-party expenses and other costs.

Special charges recognized during the three months ended May 31, 2024, under our GOE program included $ 1.8 million in severance and related benefits costs.

Special charges recognized during the six months ended May 31, 2024, under our GOE program included $ 3.9 million in severance and related benefits costs and $ 0.7 million of third-party expenses and other costs.

Special charges recognized during the three months ended May 31, 2023, under our GOE program included $ 7.0 million in severance and related benefits costs and $ 1.6 million of third-party expenses and other costs.

Special charges recognized during the six months ended May 31, 2023, under our GOE program included $ 11.5 million in severance and related benefits costs and $ 2.2 million of third-party expenses and other costs.

In 2022, our Management Committee approved an initiative to consolidate our manufacturing operations in the United Kingdom into a net-zero carbon condiments manufacturing and distribution center facility with state-of-the-art technology.

1 unchanged sentence

We expect the cost of the initiative to approximate $ 40 million—to be recognized as special charges in our consolidated income statement through 2024.

Of that $ 40 million, we expect the costs to include employee severance and related benefits, non-cash accelerated depreciation, equipment relocation costs, decommissioning and other property related lease exit costs, all directly

related to the initiative.

The total costs incurred under this program were approximately $ 36 million as of November 30, 2023.

During the three months ended February 29, 2024, we recognized $ 1.4 million in third-party expenses and other costs.

During the three months ended February 28, 2023, we recognized $ 0.4 million in accelerated depreciation and $ 0.5 million in third-party expenses and other costs.

As of February 29, 2024, accruals associated with special charges of $ 15.9 million, are included in other accrued liabilities in our consolidated balance sheet.

The following is a breakdown by business segment of special charges for the three months ended February 29, 2024 and February 28, 2023 (in millions):

Three months ended

February 29, 2024 February 28, 2023

During the three months ended May 31, 2024, we recognized a reversal of $ 0.8 million associated with severance and related benefits costs and $ 0.8 million in third-party expenses and other costs.

During the six months ended May 31, 2024, we recognized a reversal of $ 0.8 million associated with severance and related benefits costs and $ 2.2 million in third-party expenses and other costs.

During the three months ended May 31, 2023, we recognized $ 0.4 million in accelerated depreciation and $ 0.9 million in third-party expenses and other costs.

During the six months ended May 31, 2023, we recognized $ 0.8 million in accelerated depreciation and $ 1.4 million in third-party expenses and other costs.

As of May 31, 2024, accruals associated with special charges of $ 13.8 million are included in other accrued liabilities in our consolidated balance sheet.

The following is a breakdown by business segment of special charges for the three and six months ended May 31, 2024 and 2023 (in millions):

Three months ended May 31,

Six months ended May 31,

2024 2023 2024 2023

Consumer segment $ 1.5 $ 8.4 $ 3.3 $ 27.4

2 unchanged sentences

FINANCING ARRANGEMENTS AND FINANCIAL INSTRUMENTS

As of May 31, 2024, we maintained a 364-day $ 500 million revolving credit facility, which was entered into in June 2023 and expired in June 2024.

We continue to maintain a committed five-year $ 1.5 billion revolving credit facility which will expire in June 2026.

We use derivative financial instruments to enhance our ability to manage risk, including foreign currency, net investment and interest rate exposures, which exist as part of our ongoing business operations.

5 unchanged sentences

We assess foreign currency risk based on transactional cash flows and translational volatility and may enter into forward contract and currency swaps with highly-rated financial institutions to reduce fluctuations in the long or short currency positions.

Currency swap agreements are established in conjunction with the terms of the underlying debt issues.

The following is a summary of the notional amounts of outstanding foreign currency exchange contracts as of February 29, 2024 and November 30, 2023 (in millions):

February 29, 2024 November 30, 2023

The following is a summary of the notional amounts of outstanding foreign currency exchange contracts as of May 31, 2024 and November 30, 2023 (in millions):

May 31, 2024 November 30, 2023

Fair value hedges $ 824.9 $ 765.4

1 unchanged sentence

Total $ 939.6 $ 1,000.4

All of these contracts were designated as hedges of anticipated purchases denominated in a foreign currency or hedges of foreign currency denominated assets or liabilities.

All of these contracts were designated as hedges of foreign currency denominated assets or liabilities or hedges of anticipated purchases denominated in a foreign currency.

Hedge ineffectiveness was not material.

All foreign currency exchange contracts outstanding at February 29, 2024 have durations of less than 18 months, including $ 208.5 million of notional contracts that have an initial duration of less than one month and are used to hedge short-term cash flow funding.

All foreign currency exchange contracts outstanding at May 31, 2024 have durations of less than 18 months, including $ 233.1 million of notional contracts that have an initial duration of less than one month and are used to hedge short-term cash flow funding.

Contracts which are designated as hedges of foreign currency denominated assets are considered fair value hedges.

5 unchanged sentences

We also utilize cross currency interest rate swap contracts that are designated as net investment hedges.

Any gains or losses on net investment hedges are included in foreign currency translation adjustments in accumulated other comprehensive loss.

Gains or losses on net investment hedges, exclusive of interest accruals, are included in foreign currency translation adjustments in accumulated other comprehensive loss.

We exclude the interest accruals on cross-currency interest rate swap contracts from the assessment and measurement of hedge effectiveness.

We recognize the interest accruals on cross-currency interest rate swap contracts within interest expense.

Interest rate risk.

7 unchanged sentences

location Notional

As of February 29, 2024

As of May 31, 2024

Interest rate contracts Other current

assets / Other long-term assets $ — $ — Other long-term liabilities $ 600.0 $ 51.9

assets / Other long-term assets $ — $ — Other accrued

liabilities / Other long-term liabilities $ 600.0 $ 53.8

Foreign exchange contracts Other current

5 unchanged sentences

Interest rate contracts Other current

assets / Other long-term assets $ — $ — Other long-term liabilities $ 600.0 $ 52.8

assets / Other long-term assets $ — $ — Other accrued

liabilities / Other long-term liabilities $ 600.0 $ 52.8

Foreign exchange contracts Other current

4 unchanged sentences

Total $ 27.1 $ 76.3

The following tables disclose the impact of derivative instruments on our other comprehensive income (OCI), accumulated other comprehensive loss (AOCI) and our consolidated income statement for the three months ended February 29, 2024 and February 28, 2023 (in millions):

The following tables disclose the impact of derivative instruments on our other comprehensive income (OCI), accumulated other comprehensive loss (AOCI) and our consolidated income statement for the three and six months ended May 31, 2024 and 2023 (in millions):

Fair Value Hedges

1 unchanged sentence

location (Expense) income

Three months ended February 29, 2024 Three months ended February 28, 2023

Three months ended May 31, 2024 Three months ended May 31, 2023 Six months ended May 31, 2024 Six months ended May 31, 2023

Interest rate contracts Interest expense $ ( 5.1 ) $ ( 4.0 ) $ ( 10.2 ) $ ( 7.7 )

Income statement location Gain (loss) recognized in income Income statement location Gain (loss) recognized in income

Derivative Three months ended February 29, 2024 Three months ended February 28, 2023 Hedged item Three months ended February 29, 2024 Three months ended February 28, 2023

Derivative 2024 2023 Hedged item 2024 2023

Three months ended May 31,

Foreign exchange contracts Other income, net $ ( 3.8 ) $ ( 6.5 ) Intercompany loans Other income, net $ 2.5 $ 7.2

T he gains (losses) recognized on fair value hedges relating to currency exposure on third-party non-functional currency assets or liabilities were not material during the three months ended February 29, 2024 and February 28, 2023.

Six months ended May 31,

Foreign exchange contracts Other income, net $ ( 6.7 ) $ ( 5.7 ) Intercompany loans Other income, net $ 3.9 $ 7.1

Cash Flow Hedges

3 unchanged sentences

reclassified from

Three months ended February 29, 2024 Three months ended February 28, 2023 Three months ended February 29, 2024 Three months ended February 28, 2023

2024 2023 2024 2023

Three months ended May 31,

Interest rate contracts $ — $ ( 2.6 ) Interest

2 unchanged sentences

Total $ ( 0.1 ) $ ( 3.9 ) $ 0.1 $ —

As of February 29, 2024, the net amount of accumulated other comprehensive loss associated with all cash flow and settled interest rate cash flow hedge derivatives expected to be reclassified in the next 12 months is $ 0.1 million as an increase to earnings.

Six months ended May 31,

Interest rate contracts $ — $ ( 2.6 ) Interest

expense $ ( 0.3 ) $ 0.2

Foreign exchange contracts ( 0.3 ) ( 2.4 ) Cost of goods

sold 1.5 ( 1.3 )

Total $ ( 0.3 ) $ ( 5.0 ) $ 1.2 $ ( 1.1 )

As of May 31, 2024, the net amount of accumulated other comprehensive loss associated with all cash flow and settled interest rate cash flow hedge derivatives expected to be reclassified in the next 12 months is $ 0.5 million as a decrease to earnings.

Net Investment Hedges

3 unchanged sentences

excluded from the assessment of hedge effectiveness

Three months ended February 29, 2024 Three months ended February 28, 2023 Three months ended February 29, 2024 Three months ended February 28, 2023

2024 2023 2024 2023

Three months ended May 31,

Cross currency contracts $ ( 0.9 ) $ ( 3.8 ) Interest

expense $ 2.4 $ 2.9

Six months ended May 31,

Cross currency contracts $ 5.0 $ ( 9.6 ) Interest

expense $ 4.6 $ 6.2

For all net investment hedges, no amounts have been reclassified out of accumulated other comprehensive loss.

5 unchanged sentences

We account for the transfer of receivables as a sale at the point control is transferred through derecognition of the receivable on our condensed consolidated balance sheet.

The outstanding amount of receivables sold under this program were $ 19.2 million as of February 29, 2024.

As collecting agent on the sold receivables, we had $ 4.2 million of cash collected that was not yet remitted to the third-party financial institution as of February 29, 2024.

The incremental costs of selling receivables under this arrangement were insignificant for the three months ended February 29, 2024.

The outstanding amount of receivables sold under this program were $ 22.5 million as of May 31, 2024.

As collecting agent on the sold receivables, we had $ 5.5 million of cash collected that was not yet remitted to the third-party financial institution as of May 31, 2024.

The incremental costs of selling receivables under this arrangement were insignificant for the three months and six months ended May 31, 2024.

FAIR VALUE MEASUREMENTS

6 unchanged sentences

Unobservable inputs that reflect the reporting entity’s own assumptions.

At February 29, 2024 and November 30, 2023, we had no financial assets or liabilities that were subject to a level 3 fair value measurement.

At May 31, 2024 and November 30, 2023, we had no financial assets or liabilities that were subject to a level 3 fair value measurement.

Our population of financial assets and liabilities subject to fair value measurements on a recurring basis are as follows (in millions):

February 29, 2024

Fair Value Level 1 Level 2

21 unchanged sentences

Total $ 76.3 $ — $ 76.3

At February 29, 2024 and November 30, 2023, the carrying amounts of interest rate derivatives, foreign currency derivatives, cross currency contracts, insurance contracts, and bond and other long-term investments were equal to their respective fair values.

At May 31, 2024 and November 30, 2023, the carrying amounts of interest rate derivatives, foreign currency derivatives, cross currency contracts, insurance contracts, and bond and other long-term investments were equal to their respective fair values.

Because of their short-term nature, the amounts reported in the balance sheet for cash and cash equivalents, receivables, short-term borrowings and trade accounts payable approximate fair value.

6 unchanged sentences

The following table sets forth the carrying amounts and fair values of our long-term debt including the current portion thereof (in millions):

February 29, 2024 November 30, 2023

May 31, 2024 November 30, 2023

Carrying amount $ 4,112.4 $ 4,139.2

13 unchanged sentences

Although our defined benefit plans in the U.S., United Kingdom and Canada have generally been frozen, employees who are participants in the plans retained benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plans.

The following table presents the components of our pension (income) and other postretirement benefits expense for the three months ended February 29, 2024 and February 28, 2023 (in millions):

The following table presents the components of our pension (income) and other postretirement benefits expense for the three months ended May 31, 2024 and 2023 (in millions):

United States pension International pension Other postretirement benefits

6 unchanged sentences

Total (income) expense $ ( 0.2 ) $ ( 0.9 ) $ ( 1.3 ) $ ( 1.3 ) $ — $ 0.3

During the three months ended February 29, 2024 and February 28, 2023, we contributed $ 1.8 million and $ 1.9 million, respectively, to our pension plans.

The following table presents the components of our pension (income) and other postretirement benefits expense for the six months ended May 31, 2024 and 2023 (in millions):

United States pension International pension Other postretirement benefits

2024 2023 2024 2023 2024 2023

Service cost $ 0.8 $ 1.0 $ 0.3 $ 0.3 $ 0.4 $ 0.6

Interest costs 18.6 18.1 5.3 4.8 1.2 1.2

Expected return on plan assets ( 19.8 ) ( 21.2 ) ( 8.0 ) ( 7.4 ) — —

Amortization of prior service costs 0.2 0.2 — 0.1 ( 0.2 ) ( 0.2 )

Amortization of net actuarial losses (gains) ( 0.2 ) 0.1 ( 0.1 ) ( 0.1 ) ( 1.3 ) ( 1.0 )

Total (income) expense $ ( 0.4 ) $ ( 1.8 ) $ ( 2.5 ) $ ( 2.3 ) $ 0.1 $ 0.6

During the six months ended May 31, 2024 and 2023, we contributed $ 3.5 million and $ 3.6 million, respectively, to our pension plans.

Total contributions to our pension plans in fiscal year 2023 were $ 9.2 million.

All of the amounts in the tables above for pension (income) and other postretirement benefits expense, other than service cost, were included in other income, net within our consolidated income statements.

The net aggregate amount of pension and other postretirement benefits (income), excluding service cost components, was $( 2.0 ) million and $( 2.6 ) million for the three months ended February 29, 2024 and February 28, 2023, respectively.

The net aggregate amount of pension and other postretirement benefits income, excluding service cost components, was $( 2.3 ) million and $( 2.8 ) million for the three months ended May 31, 2024 and 2023, respectively.

For the six months ended May 31, 2024 and 2023, the net aggregate amount of pension and other postretirement benefits income, excluding service cost components was $( 4.3 ) million and $( 5.4 ) million, respectively.

STOCK-BASED COMPENSATION

2 unchanged sentences

The following table sets forth the stock-based compensation expense recorded in selling, general and administrative (SG&A) expense (in millions):

Three months ended

February 29, 2024 February 28, 2023

Three months ended May 31, Six months ended May 31,

2024 2023 2024 2023

Stock-based compensation expense $ 19.4 $ 26.7 $ 31.1 $ 38.5

Our 2024 annual grant of stock options and RSUs will occur in the second quarter, similar to the 2023 annual grant.

During the three months ended February 29, 2024, approximately 380,000 stock option shares were granted.

The following is a summary of our stock option activity for the three months ended February 29, 2024 and February 28, 2023:

Our 2024 annual grant of stock options and RSUs occurred in the second quarter, similar to the 2023 annual grant.

Additionally, during the first quarter, approximately 380,000 stock option shares were granted.

The weighted-average grant-date fair value of each stock option granted in 2024 was $ 17.63 and in 2023 was $ 19.35 , each as calculated under a lattice pricing model.

Substantially all of the stock options and RSUs granted in 2024 and 2023 vest ratably over a three-year period or, if earlier, upon the retirement eligibility date of the holder.

The fair values of stock option grants in the stated periods were computed using the following assumptions for our various stock compensation plans:

Risk-free interest rates 4.1% - 5.5% 3.5% - 4.9%

Dividend yield 2.3 % 1.9 %

Expected volatility 22.8 % 21.8 %

Expected lives (in years) 7.1 7.3

The following is a summary of our stock option activity for the six months ended May 31, 2024 and 2023:

(shares in millions) Number

4 unchanged sentences

Exercised ( 0.2 ) 39.60 ( 0.2 ) 46.90

Forfeited ( 0.1 ) 84.84 — —

Outstanding at end of the period 6.2 $ 71.94 5.5 $ 70.12

Exercisable at end of the period 4.5 $ 69.43 4.0 $ 63.77

As of February 29, 2024, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 38.4 million and for options currently exercisable was $ 37.3 million.

The total intrinsic value of all options exercised during the three months ended February 29, 2024 and February 28, 2023 was $ 2.6 million and $ 2.1 million, respectively.

The following is a summary of our RSU activity for the three months ended February 29, 2024 and February 28, 2023:

As of May 31, 2024, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 43.0 million and for options currently exercisable was $ 41.4 million.

The total intrinsic value of all options exercised during the six months ended May 31, 2024 and 2023 was $ 7.4 million and $ 7.4 million, respectively.

The following is a summary of our RSU activity for the six months ended May 31, 2024 and 2023:

(shares in thousands) Number

3 unchanged sentences

Outstanding at beginning of period 494 $ 76.94 480 $ 77.62

Granted 262 72.90 243 78.29

Vested ( 192 ) 84.69 ( 222 ) 78.12

1 unchanged sentence

Outstanding at end of period 549 $ 72.15 488 $ 77.51

The following is a summary of our price-vested stock options activity for the three months ended February 29, 2024 and February 28, 2023:

The following is a summary of our price-vested stock options activity for the six months ended May 31, 2024 and 2023:

(shares in thousands) Number

5 unchanged sentences

Outstanding at end of period 2,055 $ 9.40 2,057 $ 9.40

The following is a summary of our LTPP activity for the three months ended February 29, 2024 and February 28, 2023:

The following is a summary of our LTPP activity for the six months ended May 31, 2024 and 2023:

(shares in thousands) Number

7 unchanged sentences

Outstanding at end of period 473 $ 81.55 426 $ 93.67

Income tax expense for the three months ended February 29, 2024 included $ 1.6 million of discrete tax expense consisting principally of the following:

(i) $ 1.1 million of tax expense resulting from a state tax matter, and (ii) $ 0.5 million of tax expense associated with stock-based compensation.

Income tax expense for the three months ended February 28, 2023 included $ 3.8 million of net discrete tax benefits consisting principally of the following:

(i) $ 3.2 million of tax benefits associated with the adjustment of a valuation allowance due to changes in judgment about the realizability of the deferred tax asset, (ii) $ 0.8 million of tax benefits related to the revaluation of deferred taxes resulting from changes in tax rates, and (iii) $ 0.2 million of tax expense associated with stock-based compensation.

Other than additions for current year tax positions, there we re no significant changes to unrecognized tax benefits during the three months ended February 29, 2024.

As of February 29, 2024, we believe the reasonably possible total amount of unrecognized tax benefits that could increase or decrease in the next 12 months as a result of various statute expirations, audit closures, and/or tax settlements would not be material to our consolidated financial statements.

Income tax expense for the three months ended May 31, 2024 included $ 20.2 million of net discrete tax benefits consisting principally of the following:

(i) $ 19.4 million of tax benefits associated with the recognition of a deferred tax asset related to an international legal entity reorganization, (ii) $ 1.3 million of tax benefit from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations in a non-U.S.

jurisdiction, (iii) $ 0.3 million of excess tax benefits associated with stock-based compensation, and (iv) $ 0.8 million of tax expense resulting from a state tax matter.

Income tax expense for the six months ended May 31, 2024 included $ 18.6 million of net discrete tax benefits consisting principally of the following:

jurisdiction, (iii) $ 1.9 million of tax expense resulting from state tax matters, and (iv) $ 0.2 million of tax expense associated with stock-based compensation.

Income tax expense for the three months ended May 31, 2023 included $ 3.0 million of net discrete tax benefits consisting principally of the following:

(i) $ 1.2 million of tax benefits from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations in a non-U.S.

jurisdiction, (ii) $ 1.2 million of tax benefit related to a tax settlement, and (iii) $ 0.6 million of excess tax benefits associated with stock-based compensation.

Income tax expense for the six months ended May 31, 2023 included $ 6.8 million of net discrete tax benefits consisting principally of the following:

(i) $ 3.2 million of tax benefits associated with the adjustment of a valuation allowance due to changes in judgment about the realizability of the deferred tax asset, (ii) $ 1.2 million of tax benefits from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations in a non-U.S.

jurisdiction, (iii) $ 1.2 million of tax benefit related to a tax settlement (iv) $ 0.8 million of tax benefits related to the revaluation of deferred taxes resulting from changes in tax rates, and (v) $ 0.4 million of excess tax benefits associated with stock-based compensation.

Other than additions for current year tax positions, there we re no significant changes to unrecognized tax benefits during the six months ended May 31, 2024.

As of May 31, 2024, we believe the reasonably possible total amount of unrecognized tax benefits that could increase or decrease in the next 12 months as a result of various statute expirations, audit closures, and/or tax settlements would not be material to our consolidated financial statements.

CAPITAL STOCK AND EARNINGS PER SHARE

The following table sets forth the reconciliation of average shares outstanding (in millions):

Three months ended

February 29, 2024 February 28, 2023

Three months ended May 31, Six months ended May 31,

2024 2023 2024 2023

Average shares outstanding – basic 268.6 268.4 268.5 268.3

3 unchanged sentences

The following table sets forth the stock options and RSUs that were not considered in our earnings per share calculation since they were anti-dilutive (in millions):

Three months ended

February 29, 2024 February 28, 2023

Three months ended May 31, Six months ended May 31,

2024 2023 2024 2023

Anti-dilutive securities 3.6 1.9 3.2 2.0

The following table sets forth common stock activity (in millions):

Three months ended

February 29, 2024 February 28, 2023

Three months ended May 31, Six months ended May 31,

2024 2023 2024 2023

Shares issued under stock options, RSUs, LTPP and employee stock purchase plans 0.3 0.3 0.6 0.6

Shares repurchased under the stock repurchase program and shares withheld for taxes under stock options, RSUs, and LTPP 0.1 0.3 0.2 0.4

As of February 29, 2024, $ 501.2 million remained of the $ 600 million share repurchase program authorization approved by our Board of Directors in November 2019.

As of May 31, 2024, $ 497.0 million remained of the $ 600 million share repurchase program authorization approved by our Board of Directors in November 2019.

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table sets forth the components of accumulated other comprehensive loss, net of tax, where applicable (in millions):

February 29, 2024 November 30, 2023

May 31, 2024 November 30, 2023

Foreign currency translation adjustment (1)

4 unchanged sentences

Accumulated other comprehensive loss $ ( 387.6 ) $ ( 388.6 )

(1) During the three months ended February 29, 2024, the foreign currency translation adjustment of accumulated other comprehensive loss increased on a net basis by $ 2.3 million, inclusive of $ 5.9 million of unrealized losses associated with net investment hedges.

(1) During the six months ended May 31, 2024, the foreign currency translation adjustment of accumulated other comprehensive loss decreased on a net basis by $ 5.0 million, inclusive of $ 5.0 million of unrealized gains associated with net investment hedges.

These net investment hedges are more fully described in note 3.

The following table sets forth the amounts reclassified from accumulated other comprehensive income (loss) and into consolidated net income (in millions):

Three months ended Affected Line Items in the Condensed Consolidated Income Statement

February 29, 2024 February 28, 2023

Three months ended Six months ended Affected Line Items in the Condensed Consolidated Income Statement

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

(Gains)/losses on cash flow hedges:

5 unchanged sentences

Amortization of pension and postretirement benefit adjustments:

Amortization of prior service costs (1)

$ — $ 0.1 $ — $ 0.1 Other income, net

Amortization of net actuarial (gains) (1)

17 unchanged sentences

(in millions)

Three months ended February 29, 2024

Three months ended May 31, 2024

Net sales $ 904.5 $ 738.7 $ 1,643.2

Operating income excluding special charges 149.3 86.6 235.9

Income (loss) from unconsolidated operations 21.5 ( 0.2 ) 21.3

Three months ended February 28, 2023

Income from unconsolidated operations 16.1 0.7 16.8

Three months ended May 31, 2023

Net sales $ 912.1 $ 747.1 $ 1,659.2

1 unchanged sentence

Income from unconsolidated operations 10.8 ( 0.5 ) 10.3

Six months ended May 31, 2024

Net sales $ 1,826.0 $ 1,419.9 $ 3,245.9

Operating income excluding special charges 325.6 148.0 473.6

Income from unconsolidated operations 37.6 0.5 38.1

Six months ended May 31, 2023

Net sales $ 1,821.6 $ 1,403.1 $ 3,224.7

Operating income excluding special charges 327.0 134.8 461.8

Income from unconsolidated operations 24.6 ( 0.3 ) 24.3

A reconciliation of operating income excluding special charges to operating income is as follows (in millions):

Consumer Flavor Solutions Total

Three months ended February 29, 2024

Three months ended May 31, 2024

Operating income excluding special charges $ 149.3 $ 86.6 $ 235.9

1 unchanged sentence

Operating income $ 147.8 $ 86.3 $ 234.1

Three months ended February 28, 2023

Three months ended May 31, 2023

Operating income excluding special charges $ 153.6 $ 81.4 $ 235.0

1 unchanged sentence

Operating income $ 145.2 $ 76.6 $ 221.8

Six months ended May 31, 2024

Operating income excluding special charges $ 325.6 $ 148.0 $ 473.6

Special charges 3.3 2.7 6.0

Operating income $ 322.3 $ 145.3 $ 467.6

Six months ended May 31, 2023

Operating income excluding special charges $ 327.0 $ 134.8 $ 461.8

Special charges 27.4 13.6 41.0

Operating income $ 299.6 $ 121.2 $ 420.8

Total segment operating income as disclosed in the preceding table represents our consolidated operating income.

The reconciliation of that operating income to income from consolidated operations before income taxes, which includes interest expense and other income, net is presented on the consolidated income statement.

The following table sets forth our net sales, by geographic area, for the three months ended February 29, 2024 and February 28, 2023 (in millions):

The following table sets forth our net sales, by geographic area, for the six months ended May 31, 2024 and May 31, 2023 (in millions):

Americas EMEA APAC Total

Three months ended February 29, 2024

Three months ended May 31, 2024

$ 1,166.4 $ 307.3 $ 169.5 $ 1,643.2

Three months ended February 28, 2023

Three months ended May 31, 2023

1,177.9 310.6 170.7 1,659.2

Six months ended May 31, 2024

2,283.5 614.0 348.4 3,245.9

Six months ended May 31, 2023

2,272.5 594.6 357.6 3,224.7

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements